Saudi Arabia’s non-oil sector powers economic growth, aiding the real estate sector

Saudi Arabia’s non-oil sector powers economic growth, aiding the real estate sector

Amid high Grade A occupancy levels, stable rents were recorded in Q4 2023 after a significant y-o-y increase of 18%, Savills research shows Despite a projected dip in GDP to -0.5% in 2023 due to strategic oil adjustments, Saudi Arabia's non-oil sector remained robust at 4.1%, driving the economy towards growth and paving the way for a swift rebound in overall economic growth at 5% in 2024 as oil production in the Kingdom normalises. The Purchasing Managers’ Index (PMI) for December 2023 held strong at 57.5, reflecting the resilient non-oil sector driven by increasing demand, investment, and exports. This momentum is further fuelled by Saudi Arabia's ambitious Vision 2030 target of boosting foreign direct investment (FDI) to 5.7% of GDP by 2030, instilling strong investor confidence, particularly among foreign companies. Ramzi Darwish, Head of Saudi Arabia at Savills Middle East, said: “Riyadh's office market showcased remarkable agility in Q4 2023, with a 31% surge in office transactions during 2023 compared to 2022. The upward trajectory is expected to continue in 2024, even though rental values will remain stable in Q4 2023, propelled by Vision 2030's FDI goals, and sustained economic growth.” The surge in corporate interest is evident as over